Obama's jobs plan

[bpwallace49]

..Obama Goes Big — and Political — with $450 Billion Stimulus Plan

..By Daniel Gross

 

President Obama is finally laying out his latest plan to boost economic growth. The particulars of the American Jobs Act are important, and meaningful for an economy laboring under slow growth.

 

The administration believes the package, worth about $450 billion, is good economics. The centerpiece: extending and expanding the existing payroll tax holiday for another year. Instead of paying 4.2 percent on the first $106,800 of income, Americans will only pay 3.2 percent. (The usual rate is 6.2 percent) There are also tax cuts for business, funds for infrastructure and states, and money to support mortgage refinancing.

 

But, as a senior administration official described it to me this afternoon, the American jobs Act was also designed to be good politics. And with just 14 months until the 2012 presidential elections, the political calculus is almost as significant as the economic one.

 

President Obama frequently anticipates Republican criticism of his proposals by bargaining with himself instead of making declarative proposals. In this instance, he's anticipating the criticism — any measure will cost too much and add to the already large deficit! — by pairing the legislation with specific offsets and reforms, like the closing of corporate tax loopholes, and higher taxes on the wealthy. The plan he presents will be deficit neutral. What's more, ten days from now, he'll go to the Congressional deficit supercommittee and present plans on larger long-term fiscal reforms.

 

Many business groups objected to the payroll tax holiday on the grounds that it benefitted employees and did nothing for struggling employers. This time, Obama is going the extra mile for companies. The American Jobs Act offers a more generous payroll tax holiday for companies than for individuals. Businesses will receive a 50 percent reduction — paying 3.1 percent — on the first $5 million of payroll. (The theory: big businesses have plenty of cash and small businesses can use the help.) In addition, companies that add new positions will be exempt from all payroll taxes for the first year. That's a significant cut. Businesses will also be able to take advantage of accelerated depreciation, and tax credits for hiring veterans and the long-term unemployed.

 

As for direct spending, Obama will explicitly endorse the creation of an infrastructure bank, and propose substantial funds for surface transportation, school construction and renovation, and the rehabilitation of homes in neighborhoods wracked by foreclosures. Total: $105 billion.

 

Here's the rub. This all requires legislation, which means it requires the active cooperation of some House Republicans and the permission of Senate Republicans, who frequently filibuster legislation favored by the Senate Democratic majority.

 

The administration didn't present the plans to Republicans in advance. But since early this spring, the White House and Republicans have been negotiating about budget issues. And the administration feels like it knows which buttons to push. It has made a point of including ideas and proposals that Republicans - -including Republicans in leadership positions — have explicitly supported. House Majority Leader Eric Cantor has spoken in favor of a payroll tax cut for employers, and has been a stickler for offsetting new spending with cuts elsewhere. The administration official referred to the proposed infrastructure bank as the Kerry-Hutchinson infrastructure bank, as in Democratic Senator John Kerry and Texas Republican Senator Kay Bailey Hutchinson.

 

 

What's more, they have devised policies that influential Republican-friendly groups, like the Chamber of Commerce, the Business Roundtable, and the National Federation of Independent Business can get behind. Business lobbyists are likely to aid in the effort to pass new tax cuts for business as well as for infrastructure spending.

 

(The most controversial measure is likely to be the one that doesn't require legislation. Obama will endorse expanded mortgage refinancing — essentially suggesting that Fannie Mae and Freddie Mac, which are now formally owned by the government, make it easier for Americans to refinance their homes, even if they have high loan to value ratios or are underwater.)

 

These measures are designed to stimulate the economy. But they're also designed to put Congressional Republicans on the spot. Are they interested in moving the economy forward by passing measures that they and their business allies have favored and advocated? Or are they so intent on making President Obama a failure that they will refuse deficit-neutral goodies they've long favored?

 

The answer isn't a no-brainer. According to administration officials, during the debt-ceiling and budget negotiations, Republican leadership conceded that the dominant faction of the House Republican caucus wasn't interested in measures that would make the president look good by improving the economy. And time and again over the last three years, moderate Republicans have walked away from measures they previously supported — on cap-and-trade, an individual mandate for health insurance, immigration reform — simply because President Obama was for them. The White House doesn't have any greater faith in its Republican interlocutors on the Hill than it did on the spring. But it recognizes that the President has to lay out what he's for and then fight for it.

 

Team Obama believes it has put forward a plan that few people on the Hill will be able to oppose in principal. It wants Americans to draw the conclusion that the only reason Republicans would vote the plan down would be a political one. And if the voting public doesn't reach that conclusion on its own, they'll be happy to point it out in the coming months.

 

 

How will this play out? Like it usually does. The Senate Democratic majority will embrace it enthusiastically, and the House Democrats will do so with less enthusiasm. Senate Majority leader Mitch McConnell will reject it, and virtually all the Senate Republicans will line up behind him in a filibuster threat. The Tea Party crowd in the House will loudly announce its opposition and throw back a non-negotiable, unacceptable alternative. The business groups will shy away from the fight if enough members of the Republican leadership express opposition. As was the case with the debt ceiling, it will come down to the willingness of House Speaker John Boehner and a few Republicans to cut a deal.

 

Daniel Gross is economics editor at Yahoo! Finance

 

So the Republicans can support this bill . . . and be crucified by their base because they have set up Obama to be the debbil, and how can you agree with the debbil? Or they can oppose it . . and be castigated for playing purely partisan hackery politics and be exposed as shills for the uber wealthy. Obama comes out looking like a rose for helping "main street", small businesses and utilizing Republican-backed concepts like the payroll tax holiday for businesses that Cantor loves. I really dont see how the Republicans can not support this (as most of the ideas they support . . at least before Obama liked them). We will now see if the Republicans put ideology and partisan bickering over what looks to be a great deal for the American people.

 

This plan looks to be pretty damn good for businesses in general. including pre-emptive cuts to NOT add to the deficit (which in theory means that the TEA Party SHOULD support it, or be exposed as partisan hacks that dont follow their own dogma) was an unusually shrewd and intelligent move by Obama. The additional tax cuts for hiring long term unemployed is a great tactic.

 

I also like the infastructure bank concept, but selection of projects would be a bitchfest between congressional districts trying to get the projects.

 

The only part I am not as enthusiastic about is the fannie/freddie factor in this plan. I will withhold judgement on that piece for know until I can look into it more.

 

Outside of getting Bin Laden, this might be the most politically astute move Obama has made since being in office.

[Perchoutofwater]

Sounds great, I still want to see exactly how it is being paid for before I jump for joy.

[tosberg34]

Sounds great, I still want to see exactly how it is being paid for before I jump for joy.

 

We'll find out after we pass the bill. Until then, put your trust in Obama's hands.

[bpwallace49]

Sounds great, I still want to see exactly how it is being paid for before I jump for joy.

 

President Obama frequently anticipates Republican criticism of his proposals by bargaining with himself instead of making declarative proposals. In this instance, he's anticipating the criticism — any measure will cost too much and add to the already large deficit! — by pairing the legislation with specific offsets and reforms, like the closing of corporate tax loopholes, and higher taxes on the wealthy. The plan he presents will be deficit neutral. What's more, ten days from now, he'll go to the Congressional deficit supercommittee and present plans on larger long-term fiscal reforms.

 

There are some broad strokes . . . and this will be dissected word by word by the Replican caucas for something to disagree with, so there will be a ridiculous amount of scrutiny involved . . never fear . .

 

and welcome Brack.

[westvirginia]

Sounds great, I still want to see exactly how it is being paid for before I jump for joy.

 

And there's the rub. It will be paid for by benefit cuts elsewhere or tax increases. Whatever happens, obamessiah can say "It's all congress' fault! I just created the jobs, the evil congress decided to do that to pay for them!" Ballsy a-hole, isn't he?

 

Oh, and I love how NOT extending the payroll tax cuts is a "tax increase", but eliminating the shrub cuts is just putting back taxes to their "normal" levels. Unbelievable.

[bpwallace49]

And there's the rub. It will be paid for by benefit cuts elsewhere or tax increases. Whatever happens, obamessiah can say "It's all congress' fault! I just created the jobs, the evil congress decided to do that to pay for them!" Ballsy a-hole, isn't he?

 

Oh, and I love how NOT extending the payroll tax cuts is a "tax increase", but eliminating the shrub cuts is just putting back taxes to their "normal" levels. Unbelievable.

 

You must not have read the article at all, or listened to the speech. He is offering plans to make it budget neutral, NOT Congress. He is offering a plan with how to pay for it already included. Dont let your visceral hatred of the man cloud the actual facts of the article.

 

You DO know that both measures had expirations dates right? The payroll tax and the shrub tax cuts? That they were never meant to be extended into infinity . . . right?

[Skilly]

I'm confused about the corporate payroll tax cut, by 50% up to the first 5 million. I'm not a business owner, but wouldn't this mean that if I don't have to pay an extra 50% to taxes, then I can just pocket that money? My assumption is that they feel businesses will use that extra money to hire more workers, but that may not be the case.

 

There's no way that Congress allows this bill to go through, not after all that grandstanding about the defecit. The GOP will do whatever it takes to not allow this administration to make any significant progress this close to the next election. Plus, the lobbyists for big business will never go for having their tax loopholes closed.

[whomper]

I'm confused about the corporate payroll tax cut, by 50% up to the first 5 million. I'm not a business owner, but wouldn't this mean that if I don't have to pay an extra 50% to taxes, then I can just pocket that money? My assumption is that they feel businesses will use that extra money to hire more workers, but that may not be the case.

 

There's no way that Congress allows this bill to go through, not after all that grandstanding about the defecit. The GOP will do whatever it takes to not allow this administration to make any significant progress this close to the next election. Plus, the lobbyists for big business will never go for having their tax loopholes closed.

 

 

Which is why I only vote because people died to afford me that right. Politics is all about politics and has nothing to do with what is good for the poeple. That is true for both parties. I dont know why you guys spend your whole lives arguing over this SHAM WOW! anyway. Just grab your ankles and realize your efforts mean nothing

[westvirginia]

You must not have read the article at all, or listened to the speech. He is offering plans to make it budget neutral, NOT Congress. He is offering a plan with how to pay for it already included. Dont let your visceral hatred of the man cloud the actual facts of the article.

 

You DO know that both measures had expirations dates right? The payroll tax and the shrub tax cuts? That they were never meant to be extended into infinity . . . right?

 

Not according to the speech I saw. No, I didn't read your article.

 

YOU do know that that wasn't the issue, right? The fact that dear ruler says its a tax increase when he can use it for class warfare and not a tax increase at all when he needs THAT for class warfare shows he's just as big a pultroon as the rest of them.

[SayItAintSoJoe]

Not according to the speech I saw. No, I didn't read your article.

 

YOU do know that that wasn't the issue, right? The fact that dear ruler says its a tax increase when he can use it for class warfare and not a tax increase at all when he needs THAT for class warfare shows he's just as big a pultroon as the rest of them.

 

 

Forget what the dear ruler thinks. What do YOU think?

 

a. Is not renewing the payroll tax cut a tax increase?

 

b. Is not renewing the Bush tax cuts a tax increase?

 

IMO these are YES or NO type questions. What say you?

 

BTW, I answer "NO" to both.

[muck]

...pultroon...

 

What's a "pultroon"?

[Ursa Majoris]

What's a "pultroon"?

Poltroon

[Ursa Majoris]

Not according to the speech I saw. No, I didn't read your article.

 

YOU do know that that wasn't the issue, right? The fact that dear ruler says its a tax increase when he can use it for class warfare and not a tax increase at all when he needs THAT for class warfare shows he's just as big a pultroon as the rest of them.

Enough with the class warfare BS.

[westvirginia]

Forget what the dear ruler thinks. What do YOU think?

 

a. Is not renewing the payroll tax cut a tax increase?

 

b. Is not renewing the Bush tax cuts a tax increase?

 

IMO these are YES or NO type questions. What say you?

 

BTW, I answer "NO" to both.

 

In both cases they ARE tax increases. When you're paying "X" currently, and the new tax is "X+Y", that's an increase in taxes.

 

 

Poltroon

 

Thank you - my spelling's not what it used to be.

 

Enough with the class warfare BS.

 

I agree, obamessiah should quit using class warfare BS and focus on what's best for ALL americans...

[Ursa Majoris]

Thank you - my spelling's not what it used to be.

 

 

 

I agree, obamessiah should quit using class warfare BS and focus on what's best for ALL americans...

What we should do is lower tax rates on the rich to zero, then they'll hire everyone without a job and it'll all be fluffy bunnies and rainbows from there. If that doesn't work, I suppose we could drive down the wages of people not in the top 2%, which would give some more hiring incentive. It should be easy for people to live on $3 / hour.

[detlef]

I'm confused about the corporate payroll tax cut, by 50% up to the first 5 million. I'm not a business owner, but wouldn't this mean that if I don't have to pay an extra 50% to taxes, then I can just pocket that money? My assumption is that they feel businesses will use that extra money to hire more workers, but that may not be the case.

 

There's no way that Congress allows this bill to go through, not after all that grandstanding about the defecit. The GOP will do whatever it takes to not allow this administration to make any significant progress this close to the next election. Plus, the lobbyists for big business will never go for having their tax loopholes closed.

Your logic is sound. Far more sound than the trickle-down fans who insist that jobs are created not because of an increased demand, and thus, need to increase production, but rather because rich dudes have extra money and can't think of anything better to do with it than hire people they may or may not need.

[westvirginia]

Your logic is sound. Far more sound than the trickle-down fans who insist that jobs are created not because of an increased demand, and thus, need to increase production, but rather because rich dudes have extra money and can't think of anything better to do with it than hire people they may or may not need.

 

Lets say they do pocket that money. What would they do with it? They aren't shoving it in their mattress or burying it in a coffee can in the back yard. Let's say they don't want to expand or open another business right now, because they don't know what they're going to have to pay for obamacare, all his new regulations or what tax increases might be coming. So then, it goes into the market, or even a bank. Where someone else might use it for their business, except they are afraid of the same things that scare our hero. You see why we'll have no recovery with this man in office? People who actually know how to create jobs and grow the economy are scared of this guy.

[BeeR]

Sounds great, I still want to see exactly how it is being paid for

By tax cuts.

 

 

I thought spending more while cutting taxes was a Republican trick.

 

PS I am not saying this plan is good or bad per se, in fact admit I don't know it near well enough to say. But that was the gist of what I got out of it. So if any econ experts out there can splain it, pls do.

[Ursa Majoris]

So then, it goes into the market, or even a bank.

Yesterday was proof positive that all the money is going into the market. You could see that from the way shares shot up.

[muck]

 

I'm not sure that one day is a big enough sample size.

 

[WaterMan]

If we can cut taxes and borrow money to keep wars afloat, why can't we do the same for jobs?

 

Lets say they do pocket that money. What would they do with it? They aren't shoving it in their mattress or burying it in a coffee can in the back yard. Let's say they don't want to expand or open another business right now, because they don't know what they're going to have to pay for obamacare, all his new regulations or what tax increases might be coming. So then, it goes into the market, or even a bank. Where someone else might use it for their business, except they are afraid of the same things that scare our hero. You see why we'll have no recovery with this man in office? People who actually know how to create jobs and grow the economy are scared of this guy.

 

Or maybe it's because the rich are scared seeing the number of homeless people increase. The last thing they want is a stinky homeless person coming into their Frebreeze'd office tracking lice and dirt everywhere.

[detlef]

Lets say they do pocket that money. What would they do with it? They aren't shoving it in their mattress or burying it in a coffee can in the back yard. Let's say they don't want to expand or open another business right now, because they don't know what they're going to have to pay for obamacare, all his new regulations or what tax increases might be coming. So then, it goes into the market, or even a bank. Where someone else might use it for their business, except they are afraid of the same things that scare our hero. You see why we'll have no recovery with this man in office? People who actually know how to create jobs and grow the economy are scared of this guy.

You just made the perfect argument for why trickle-down is about the worst way imaginable to turn around a struggling economy. Giving the top extra money in uncertain times means the top has money that they're either too afraid or too smart to invest in anything, so it just sits there doing nothing.

[Boilerduff]

I just love how Obama touts his working with Republicans, and does the exact opposite. Like was said earlier, this proposal is a lose lose for Republicans, so that he can try to turn it into an election issue.

 

This was him looking to gain bipartisanship? I'd hate to see what it would look like if he wasn't trying for bipartisanship. Oh right, Obamacare... Sorry.. forgot.

 

That should worry even the Democrats. If you think both sides should work together, you should be blasting this bill. Inserting stuff that won't pass for politics is stupid. This guy is only worried about one Job, and that is his.

 

Anyone but Obama in 2012 !!

[Ursa Majoris]

I just love how Obama touts his working with Republicans, and does the exact opposite. Like was said earlier, this proposal is a lose lose for Republicans, so that he can try to turn it into an election issue.

 

This was him looking to gain bipartisanship? I'd hate to see what it would look like if he wasn't trying for bipartisanship. Oh right, Obamacare... Sorry.. forgot.

 

That should worry even the Democrats. If you think both sides should work together, you should be blasting this bill. Inserting stuff that won't pass for politics is stupid. This guy is only worried about one Job, and that is his.

 

Anyone but Obama in 2012 !!

Name me one compronise Republicans have made. Just one. They are currently opposing a tax cut for most people - and you have the brass balls to say Obama is politicking?

[bpwallace49]

I just love how Obama touts his working with Republicans, and does the exact opposite. Like was said earlier, this proposal is a lose lose for Republicans, so that he can try to turn it into an election issue. This was him looking to gain bipartisanship? I'd hate to see what it would look like if he wasn't trying for bipartisanship. Oh right, Obamacare... Sorry.. forgot.

 

That should worry even the Democrats. If you think both sides should work together, you should be blasting this bill. Inserting stuff that won't pass for politics is stupid. This guy is only worried about one Job, and that is his.

 

Anyone but Obama in 2012 !!

 

So if the unemployed get jobs, then the Republicans lose"? I would think they cared more about employing Americans. I guess not?